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Why are Traders Bearish on TiVo?

TiVo is presenting at an investor conference this afternoon, and the bears are staying tuned.

OptionMonster's tracking programsdetected the purchase of at least 6,700 February 10 puts yesterday for an average premium of $1.24 and the sale of a matching number of January 10 puts for $0.45. Volume was above open interest in the February contracts, indicating the position was opened, while it was below open interest in January, suggesting they were closed.

TiVo rose 4.42 percent to $10.63. The digital video-recording company has been mostly trading between $9 an $11 since June as investors weigh poor earnings against positive legal rulings.

Yesterday's options trade let the investor roll forward a protective position on the stock for another month at a net cost of $0.79.

TiVo will make a presentation at the Citi Global Entertainment conference after the bell today. At least one Web site also reported rumors DirecTV could make an announcement regarding TiVo at the International Consumer Electronics Show, which runs Jan. 7-10. The company's last earnings release was on Nov. 24.

Overall options activity in TiVo was four times greater than average, with puts outnumbering calls by more than 2 to 1.

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TiVo Competes With:

AT&T

Microsoft

Sony

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David Russell is a reporter and writer for OptionMonster.

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